…. as green investments/sustainability become a focal point

The Yale endowment has a substantial and growing exposure to green investments with allocations in timberland, emerging markets and venture capital including more than $100 million in cleantech.

In the endowment’s 2009 fiscal year report it states that its exposure to cleantech is growing rapidly and in the past year alone Yale’s venture capital managers invested in more than nine new cleantech companies.

There are about 70 early-stage cleantech companies in the Yale portfolio.

Yale has increased its exposure to the sector in the marketable, real assets, and leveraged buyout portfolios as well.

“We are confident that the University stands to benefit enormously from the endowment’s involvement in green ventures, both as an investor and as a stakeholder in the health of the environment.”

Sponsored Content

The report disclosed a number of significant investments in cleantech companies, including Silver Spring (the developer of technology for smart grids), and Mascoma, a bio-ethanol research and development company.

Within emerging markets the endowment has invested in a number of public and private companies that provide solutions to reduce reliance on highly polluting fossil fuels including HT Blade, a Chinese wind turbine producer which among other things provides 90 per cent of the Chinese domestic demand and has just signed a $300 million deal to provide wind farms in Dallas, Texas.

Suntech Power Holdings has also been an endowment investment, the largest solar cell manufacturer in the world, also a Chinese-based company but listed on the New York Stock Exchange.

Yale has more than three million acres of timber investments that are all managed in a sustainable fashion.

In recent years Yale’s timberland managers have become increasingly involved in alternative energy projects that curtail carbon dioxide emissions.

Windfarms on forestlands represent another opportunity in which the endowment’s managers see potential.

“Investments in wind on Yale lands could provide a meaningful economic return to the endowment while helping the university achieve its sustainability goals. Yale’s wind power projects could play a critical role in helping Yale reach its stated goal of reducing 2020 emissions to 10 per cent below 1990 levels, further Yale in its quest to become the world’s greenest university,”the report said.

Timber is part of Yale’s real assets portfolio which in the past year returned 32 per cent, and since inception in 1978 has returned 14.3 per cent per annum.

According to the 2009 report a critical component of Yale’s ivnestment strategy is to create strong, long-term partnerships between the investments office and its investment managers. In the last decade, Yale has been involved in the development and growth of more than 12 organisations involveed in the management of real assets.

For real assets Yale uses an active benchmark of NCREIF and Cambridge Associates Composite and for private equity it uses the Cambridge Associates Composite.

Leave a Comment

Sort content by

CFA to lead industry out of crisis

Protecting the pension system is one of six key themes at the centre of the CFA Institute’s Future of Finance initiative as it aims to empower the investment industry to take leadership in restoring trust. Speaking at the sixty-sixth annual CFA Institute conference in Singapore this week, president and chief executive of the CFA Institute,

Tail risk parity, V 1.0

Just when you thought you were safe, the next reiteration of risk parity has arrived. AllianceBernstein’s tail risk parity takes the concept of risk parity, reallocating assets uniformly according to risk, but it uses tail risk, not volatility, as the core measure. The concept of risk parity is a portfolio diversified according to risk, rather

Retirement: a cause worth working on

There are two things that drive the newly appointed global chief operating officer of State Street Global Advisors, Greg Ehret, in his bid to improve the client experience: the retirement business is a cause worth working on and the clients are the reason the business exists. Ehret was appointed to the new position at SSgA,

Pension funds, where banks no longer go?

There continues to be potential for pension capital appearing where bank lending no longer wants to go. Commentators in the UK and continental Europe have heightened expectations that pension funds will step in to help fill the continent’s bank financing gap. Societe Generale, for instance, recently predicted further “disintermediation” by investors sidestepping banks and looking

Building consensus for investment beliefs at CalPERS

An investment-beliefs workshop for the CalPERS board, held in April, revealed five areas, including active management, where the views of the board and staff lacked consensus. The contentious, or unsettled, topics for discussion were active management, private asset classes, sustainability (environmental, social and governance), investment performance targets and stakeholder considerations. At the board workshop, Janine

Behind PGGM’s ESG index

In 2010 PGGM conducted a study to see if it was possible to reduce the number of companies it invested in from 4000 to 400, based on its environmental, social and governance leanings, and still maintain it’s beta risk/return profile. The idea was that the €133-billion ($174-billion) fund would better know and understand what it

Previous